Galileo Canadian Active/Passive Fund

GlobeinvestorGOLD.com, Tuesday, March 4, 2008 Author: ANDREW ALLENTUCK

WINNIPEG (GlobeinvestorGOLD) – Michael Waring has enhanced the performance of a buy low/sell high large cap Canadian index fund with a managed small cap portfolio.

His Galileo Canadian Active/Passive Fund generated a 7.4-per-cent return for the 12 months ended Feb. 29, 2008, significantly higher than the 4.1-per-cent return of the S&P/TSX Composite index in the same period.. Mr. Waring, president of Galileo Global Equity Advisors Inc. in Toronto, has managed the $2.1-million fund since inception in November, 2006.

“The fund really has two characters,” Mr. Waring said. “Sixty per cent of the fund is invested in the fifty largest Canadian stocks measured by market cap and equally weighted. The weighting is the key to how it runs, because every six months the fund sells stocks that have risen above equal weighting and buys those that have dropped below it. That means the fund is selling leaders and buying the followers, in effect, buying low and selling high. That is something that market weighted index funds don’t do. The fund adds 40 per cent actively managed small caps to the large cap mix. We have backtested the blend and found that it adds upside potential and downside protection to the portfolio.”

Eastern Platinum Ltd. is a Vancouver-based company that mines its namesake in South Africa along with rhodium, palladium, ruthenium, osmium and iridium along with small amounts of gold, and quantities of associated nickel, copper and cobalt. Shares purchased at an average cost of $2.42 have recently traded at $3.66. Platinum recently hit $2,000 (U.S.) per ounce and has recently outperformed gold, much of which is hoarded as an alternative to paper money.. Platinum has many robust industrial uses, including in automobiles’ catalytic converters. Locomotives and ships will soon have to be equipped with emission control devices using platinum, Mr. Waring said. Earnings for the year ended June 30, 2009 should rise to 18 cents per share from 14 cents a year earlier, he noted. Within 12 months, shares should hit $4.50, he suggested.

US Geothermal Inc., based in Boise, Idaho, develops power projects in Idaho and Oregon. Shares purchased at an average cost of $2.85 have recently traded at $2.77. The cost of geothermal power, spread over the life of a plant, is very low while the price of the power produced is at the level of conventional thermal power, Mr. Waring said. Earnings for the year ended March 31, 2009 should rise to 5 cents (U.S.) from 2.5 cent loss a year earlier. Within 12 months, shares should hit $4.50, he forecasted.

Zhongshen PEM Power Systems Inc. is a Vancouver-based company that makes electric scooters and bicycles in China for the domestic market. Shares purchased an average cost of $3.12 have recently traded at $3.65. Electric bikes are very popular in China as cities begin to ban the sale of gas-powered scooters. Earnings for the year ended Dec. 31, 2009 should rise to 27 cents from 13 cents a year earlier and a 1 cent loss in 2007, Mr. Waring said. Shares should hit $5.25 within 12 months, he suggested.

For further information: Dan Hall, Executive Vice President, (416) 594-0606